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WTO Chief means well for Africa

By K. Acngashi

 

Five months after the squalid failure of the Third WTO Ministerial Conference in Seattle, and four months after UNCTAD X in Bangkok which provided lubrication for the squeaks and groans inflicted on the latter, and given the latest information that Director General of WTO, Mike Moore has a planned 3-4 year program for Africa - the most laggard of the continents in the multilateral trading system, I thought I should make a modest contribution on what is going on in the WTO and how I perceive the future.

To start with, I wish to correct the impression that may exist among some Africans that that the lopsidedness of the Uruguay Round Agreement and the non-transparency manner in which the WTO handles its major events such as the Ministerial Meetings are a product of the WTO secretariat and its Director General (DG) in this case Mike Moore. I wish to state that it is very easy to confuse the WTO secretariat with developed countries. To an ordinary person in the street, perhaps the secretariat is synonymous with rich countries. But, who, in fact is the WTO? In developed countries, when we hear of protests against the WTO, maybe protestors and ordinary citizens understand exactly what constitutes the WTO. In Africa, not many people may know. The WTO is Africa, Latin America, Asia, Europe, North America, and other continents. It comprises both rich and poor countries. It is our own baby. The secretariat and its DG are not the WTO.

Africas central problems in the WTO revolve around the imbalances and biases created by rich countries in the Uruguay Round Agreement (URA). Africas problem lies in the inability of rich countries to genuinely make it an equal participant. The Agreement was deliberately made unfair in many ways. For instance, it failed to recognise the need to create conditions for its implementation. The Agreement should have come after necessary conditions for implementation such as adequate technical assistance, and improved environment were put in place. WTO should have drawn lessons from industry (its reason detre) that identification of customer needs and developing a product that satisfies those needs is at the heart of business. Companies that started with products first then, selling them have often met with difficulties. It is like Africas stock markets whose creation was legal-driven instead of demand-driven.

The WTO discriminates against poor members. This is the core problem. Says former DG, Renato Ruggiero, Industrialised countries have not lived up to the spirit of liberalisation (such as textiles), made excessive use of anti-dumping measures, or failed to respect the principle of special and differential treatment (S&D). In short, these countries see an imbalance in the way existing agreements affect them, and they see this as a problem which needs a political solution, not just more technical assistance.

Before Seattle, it will be recalled that Moores first task as DG was to sound his wish for rich country members of the WTO to give not only free but bound market access for all products from Least Developed Countries (LDCs), most of whom are in Africa. Since then, he has bravely continued to urge these countries to make this donation, which he says would not cost them much. Soon after Seattle, he embarked on a confidence-building initiative in the WTO on the basis of making improvements on four elements of the organisations work: market access for LDCs; implementation issues for developing countries; technical assistance; and internal transparency of the WTO. In all these elements, the idea was to improve the participation of developing countries especially LDCs in the WTO and lay a positive foundation for the forthcoming negotiations on Agriculture and services this year as well as the next round.

At the General Council Meeting of 3 May 2000, Moore reported on the outcome of the initiative. Although his report was full of optimism, the reality on the ground is that many Africans were unhappy with the outcome of the initiative. Again, this wasnt Moores fault. In fact, he too was disappointed.

LDCs, Moores central target for rich countries help in the WTO did not get bound duty free and quota-free market access. Instead, rich countries hid their shame in the language that theyd provide " market access by according and implementing tariff-free and quota-free treatment consistent with domestic requirements and international Agreement, under their respective preferential schemes for essentially all products originating in least developed countries." The gist of this is that domestic measures predominate again over multilateral measures. It also means absence of security for market access. "Originating" also has rules of origin implications. In short, LDCs remain where they were before Seattle over this matter.

Some critical questions regarding the market access offer by rich countries arise: What is the meaning of "essentially all" and the intention behind this wording? If they wish to exclude some products from duty/quota free treatment, what would be these products? Would they be confined to those covered by special provisions within the WTO Agreements, e.g. Transitional safeguard on textiles, special treatment on agriculture, or would there be individual lists of exceptions? Would they adopt one common formula for the duty free treatment, or would there be individual lists? Would there be a common set of rules of origin? Would these be designed to take account of the special weaknesses of LDCs in processing? Would cumulating among LDCs be permitted? Why is binding avoided? Would it be possible to present various options of achieving security for the duty/quota free treatment? As WTO is about rights, what rights does the proposal give to LDCs and what recourse would be available for LDCs if such treatment were removed unilaterally?

Clearly, LDCs need something new, something long-term, and something with binding rules. They need something like a protocol, acceptable by all.

On implementation, major lacuna exists in the rich countries proposal. The proposals on Trade Related Investment Measures (TRIMS) and Customs Valuation focus on transitional periods on a case-by case basis and on the basis of a calendar. Such requests are not likely to be entertained and if they were, theyd be subjected to a strict timetable for their elimination. Why shouldnt the transitional periods be extended for all LDCs without any pre-conditions of case by case? Why not on the basis of their development, financial and trade needs? Whatd be the adequate period of extension for LDCs? Should this be linked to the availability of sufficient resources to LDCs to effectively implement these agreements? What about the exemption of LDCs from the application of local content requirements to support industrial development?

On Sanitary and Phyto-sanitary (SPS), the package focuses also on extension of transitional period by 3 years. What effective measures would be taken to implement Articles 9 and 10 on technical assistance and special and differential treatment (S&D) to build up capacity of LDCs in respect of transfer of processing of technology as provided in Article 9 of the SPS Agreement? Rich countries made this commitment and therefore it should be implemented in a fundamental way. Otherwise, today Africa maybe given bound market access but without adequate standards, rich countries will still bar these products on the basis of unilateral measures.

The controversial TRIPS Agreement is not included in the rich countries proposal. Article 66.2 of this Agreement provides for rich countries to provide incentives to their enterprises and institutions for transfer of technology to LDCs for them to improve their technological base.

Africa should be focusing on making rich countries operationalise developmental-oriented Agreements such as the TRIPS Agreement. Rich countries implemented TRIPS ignoring this provision. Further, in spite of their lacklustre to do so, they are enthusiastic to see that developing countries implement completely TRIPS within this year for non-LDCs and by year 2006 for LDCs. When challenged, they have argued that they have been implementing the provision through bilateral initiatives. But, this is untrue and deceptive.

Technical assistance is skewed toward serving rich countries interests in the URA. It does not impact negotiation skills on poor countries. Neither does it on understanding critical issues of a developmental benefit in the URA. Instead, it concentrates on understanding the multilateral trading system such as implementing TRIPS. As one study observes, It is not clear what has motivated the refusal of the member countries in recent years to provide even minimal adequate levels of technical co-operation funding through the regular budget. Money cannot be the real issue, since the amount involved is so trivial. So, if it is not the money, what is it that explains the state of the WTOs technical co-operation budget? It is hard not be suspicious that at least one factor is a desire by many WTO members to avoid increasing the capacity of the Sub-Sahara Countries to play an active and effective role in the WTO.

In terms of the proposal, it calls for another study of existing technical co-operation. Technical assistance needs of LDCs have been identified and quantified and the delivery of technical assistance programmes by WTO as well as with UNCTAD since 1995. What resources can be committed to LDCs? Is it Swiss Francs 10 million for the regular budget as suggested during preparations for Seattle Meeting? And which portion would be devoted to LDCs? When would these be made available and through which forum WTO, UNCTAD, LDC directly, etc? Shouldnt the rich countries begin implementation of the Integrated Framework in some selected LDCs?

To recapitulate the earlier point: these imbalances and many more are not a product of Moore, the Director General of WTO or his secretariat. Just like the exclusive greenrooms or lack of transparency in decision-making in the WTO is not.

Africa would do better to target these issues at the rich countries. They must set objectives in terms of priorities; create a strategy to achieve them and make a case and presentation to their rich trading partners. This could be done even before the mandated issues and definitely the next round take place. Yes, multilateral negotiations take place in the WTO in Geneva. But, dialogue can be done in capitals of rich countries.

Moore can effectively act as a broker. He intends to visit many African countries. Indeed, he must be given all the necessary support. Africa should allow him to talk to all relevant people from heads of states to ordinary businessmen and women who wish to benefit from WTO rules. It is necessary for him to sensitise heads of states to issues of WTO. We all know that most African leaders have put these issues at the back seat. By talking to heads of states, it might help to put multilateral rules on the political agenda in Africa. It might help to mainstream trade policy into the overall national strategies, which is lacking at the moment. It is up to Africans themselves to be smart and get out of Moore something valuable. Africa needs Moore as much as Moore needs it.

Moore could be thanked for his efforts on market access and capacity building through technical assistance for LDCs. But, he could also be assisted to understand that these efforts need to be harmonised with technology-focused efforts as highlighted in some of the WTO Agreements. Africas problem is the lack of supply capacity to produce products and services that can sell abroad. Market access and technical assistance without actions on productive capacity are not enough. As Moore might have learnt when he was in Africa: in Africa, a meal is only complete if it has relish and ugari, fufu, or nshima.

Africa, made it clear in its proposals to the third WTO Ministerial Meeting that rich countries should opperationalise Agreements such as those cited above. And they should hammer this point again to Moore. They should help Moore to help them identify Agreements in the WTO that will improve their supply base. That is what basically all these Agreements talk about but are not translated into action. Clearly, there must be a honest way of honouring obligations in an integrated and co-ordinated manner by rich countries that can help Africa get back on the road again. But, this does not preclude WTO from starting to improve Africas situation through its core business such as market access, implementation and compliance. Africa must make the point that beyond the usual implementation in the jargon of the WTO, there is another dimension. That is supply-focused.

I have strong reasons to place my hopes in Moore. Moore has with him a team of competent and experienced people. In his Personal Assistant, Mr. Patrick Low, a Kenyan-born British, with a long experience in the WTO at Director level, Moore can enjoy a sense of brilliant advice on technical issues of WTO. Low is a frank and open person who often talks to African diplomats in Geneva candidly. For the first time in the history of the WTO and its predecessor (GATTS), Moore has appointed an African as one of his four Deputy Director Generals. This is a record for Africa. Mr. Ouedraogo Ablasse is former Minister of Foreign Affairs of Burkina Faso, an LDC without a presence in Geneva. In addition, he comes with a record of experience of the United Nations. Having worked at the UNDP, he knows how technical assistance programs should be delivered to benefit Africa. Africa will expect him to leave a print of good work in the WTO. Africa looks forward to working with him.

Moore becomes the first DG of the WTO and its predecessor - the GATTS to go to Africa to be specific he went to the country and city in which this article is being published - headquarters of the Organisation for African Unity (OAU) where he met African Ambassadors, the Secretary General of the OAU and many other Africans. He must be given similar chance to meet African heads of states. This may sound trivial. But, for him as a person, this is how far he can go. Addressing the real issues remains the chief responsibility of Africans themselves and their rich trading partners with Moore as a broker. Again, he needs help to push Africa up-front. Africa must proactively involve Moore in their affairs at the WTO. They must present proposals that he can market to members particularly the "inner circle" as someone calls the rich countries that control the WTO. He may fail on securing multilateral market access but he might succeed on others. Id be the first to condemn him if out of ten concrete, reasonable and different proposals given to him he came back and told Africa that he failed all. But, the man must be given chance first.

Transmitted 13 June 2000

 

 

 K. Acngashi, Switzerland, email c/o KMubu@tsa.ac.za

Date Uploaded 1/23/2008
Copyright Africa Economic Analysis 2005